Russ: This is the BusinessMakers Show heard here and online at thebusinessmakers.com. And now it is time for the Aflac BusinessMakers Flashback, brought to you by Aflac, ask about it at work. And for this mornings Flashback we are going to revisit our interview with the founder and former CEO of Laura Mercier Cosmetics, Janet Gurwitch. She was the person that was in line to be the first female CEO of Neiman Marcus, but abandon that mission just to start her own company. Let's start with Janet's description of Laura Mercier Cosmetics.

Janet: Laura Mercier is a global cosmetics company that sells in the upscale niche of 25 countries. We sell cosmetics, color cosmetics, skin care, and bathroom body products.

Russ: From what I understand, the company started in 1996?

Janet: That's correct.

Russ: Isn't that kind of bold to break into that world in 1996? I mean-weren't there Estee Lauder and Channel, and all those guys sort of had that market wrapped up?

Janet: Unbelievably competitive marketplace, but I did see there was a niche and an opportunity, and I decided to take it.

Russ: Okay, where were you that you saw this niche?

Janet: At the time, I was executive vice president of Neiman Marcus. My background's been retail, and at Neiman Marcus you could see so many businesses beginning. Like you would look for the next Armani or the next Channel, and I could tell that there would be an opportunity for new names behind great brands in the millennium we're now in, and I had never had an entrepreneurial thought before that, and I had it, and I decided at the age of 40 to go for it.

Russ: Well, okay, now, being executive vice president at Neiman Marcus, that's kind of pretty high up the corporate ladder there, isn't it?

Janet: It's very high up the corporate ladder, and it was a very glamorous job. When Princess Diana gave a reception for ten top U.S. retailers at the Kensington Palace, I attended.

Russ: Whoa.

Janet: I was sat on the front row of the Channel and Armani shows. It's a very glamorous job, and I loved it, but I thought I wanted it to be my business, not Neiman Marcus and decided to take this chance.

Russ: Okay. Before you decided to just dive out there and do your own thing were you thinking that the world was great, and your career was exactly what you wanted it to be?

Janet: To be honest with you, my goal was to be the first woman's CEO of Neiman Marcus.

Russ: Okay.

Janet: And for me to leave this idea, I was so confident in this idea, that I decided to leave, and Karen Katz, she is the first woman CEO of Neiman Marcus, but that was my goal. I was very happy until I-I just had such a drive to build a business.

Russ: So, this drive, did this happen over a two or three-year span, or was it just like all of a sudden?

Janet: Well, I'd say it'd be about two or three years. We had a brand named Bobby Brown which I don't know many of your female listeners will know about. And Bobby was doing what I was so impressed with. Her name was not well known like Estee Lauder or Channel, but every month I would notice how strong her business was in all the Neiman's across the country, and so my first idea actually was to buy Bobby Brown. She was doing about $20 million dollars, and I had some investors with me in Dallas, and we were going to buy Bobby Brown, only to find out that Leonard Lauder, CEO of Estee Lauder, heard what I was doing, and I always say, he took her to dinner and bought her by dessert, and so I thought. He'd never bought a company before, and I'd never wanted a company before, decided I was on the right track, and decided to do my own Bobby Brown.

Russ: Wow, so his interest and acquisition in this company that you were watching confirmed that you had a great idea, right?

Janet: It did. It gave me even more confidence, and I knew that the marketplace did not need another Bobby Brown, but I think as an entrepreneur you don't always have to be first. A quick second is not bad, and so we did it differently.

Russ: Okay. Just so our listeners know, Janet grew this company very successfully and sold it two or three years ago?

Janet: We sold it in August, 2006.

Russ: Okay. We've had quite a few entrepreneurs on this show talk about the trials and tribulations. Was Laura Mercier, was it a piece of cake the whole way, or did you have any challenges?

Janet: I often thought I could write a book, How Not To Start a Cosmetics Company, because we had so many challenges. I really would say I had three great challenges, and that is one, insufficient capital. Two, I undervalued the importance of packaging in a luxury cosmetics business.

Russ: Well, and I've got to say, that's real important, isn't it?

Janet: So important.

Russ: Okay.

Janet: And, and then three, I sold initially everyone who came to the door, so I sold Macy's and Neiman's at the same time, and in the upscale tier, that's a no-no.

Russ: Okay, wow. When you were dealing with those three challenges, were you thinking, my God, what have I gotten myself into? I had that great job and look where I am now?

Janet: To be honest with you, I was always confident. I was nervous. I was scared, but I was always confident that we would make it. I was so certain of our product quality, the store relationships that we had, and I knew our timing was right.

Russ: Okay, I want to talk about there's this other person, Laura Mercier, which plays a key role in your formula?

Janet: Laura Mercier is a French-born artist, who when I met her was doing the makeup for all the covers of Vogue magazine. She was Madonna's main makeup artist, and Julia Roberts, as well, and later became Sarah Jessica-Parker's main makeup artist.

Russ: Wow, and you know her well, and your company carried her name, right?

Janet: That's right. I licensed the name, Laura Mercier, and Laura was an integral part and still is an important part, of the brand. The way I found Laura Mercier-and I did not know her name-I called the beauty editors of Vogue magazine, Harpers Bazaar, and Allure magazine, and asked them, who were the world's top makeup artists? They were all men, with the exception of Laura and one other woman, and I truly pictured a woman to build my business around.

Russ: Okay.

Janet: So, I met Laura. She had this unbelievable portfolio because she was Madonna's main makeup artist, and at that time Madonna was doing lots of videos and Laura was getting tremendous experience. She was Julia Robert's artist, and really she was called the "artist to the stars."

Russ: Wow, so, how did you even know that building a business with one of these makeup artists was going to be part of your formula?

Janet: Well, I wanted my business to be the real thing. In cosmetics a lot of it's marketing, and I wanted mine to be the real thing, so I wanted it built around someone who was very talented, who knew what would make the top quality makeup, and so I wanted an artist, someone who worked with cosmetics professionally.

Russ: Okay. Your arrangement with her-I mean-it was still your company, in her name. What sort of business arrangement was that?

Janet: It was a licensing agreement.

Russ: Okay.

Janet: I licensed the rights to Laura's name for perpetuity, and for that, she obviously got compensated well, and she had to do so many personal appearances a year, a tremendous amount of publicity for our company, and work in the lab and help us develop products.

Russ: Okay, well, that is a real interesting strategy that apparently paid very well for the company?

Janet: That's right. It worked well for all of us.

Russ: Okay, well I know you had some highlights along the way too. Share some of those with us.

Janet: I would say one of the first highlights was when we went international. We opened in the UK, and we opened at Heralds, and that was very exciting.

Russ: Okay, were you there?

Janet: I was there with Laura Mercier. We cut a ribbon. It was a very exciting time, and to this day, Heralds is one of our largest stores.

Russ: Wow, cool.

Janet: Secondly, is when we launched LauraMercier.com on the web, which was December, 1998.

Russ: Wow, did you have high expectations or did it surprise you?

Janet: It surprised me how quickly it caught on. I was just learning myself the importance of doing business on the web, and today at Laura Mercier, in the top ten doors worldwide, three of the doors are dot coms, so it was very exciting, great learning experience. It was our way to relate to the ultimate customer.

Russ: Okay, now you said the top ten doors?

Janet: Yeah.

Russ: Is that like a cosmetic term or something?

Janet: It is a cosmetic term. A door would be, like in Houston we sell in three doors. Nordstrom's would be a door. Sacs would be a door, and Neiman's would be a door.

Russ: Okay, in fact, speaking of that, I think one of the highlights also of you building this company and watching it grow is actually selling it, which you did how long ago?

Janet: We sold in August 2006.

Russ: Okay, was a big time, big day for you?

Janet: It was a very exciting experience selling a company, and Neiman Marcus was my partner, and they had sold Neiman Marcus in January, 2006, so I have to credit them for the great timing in the economy. But we sold in August 2006 to ALTACOR, a privately based company from Grand Rapids, Michigan, and it was a great experience for the company and for me personally.

Russ: Okay, and the brand goes on to this day, correct?

Janet: The brand is very strong, opening now in three or four more countries, but one of the top brands in the upscale tier in the United States as well.

Russ: Okay, cool, so before I let you go, got to ask you this. Say we have an aspiring entrepreneur out there that's totally fascinated by your story and really would like to have some advice, so what kind of advice would you give to somebody that's young that thinks they want to start their own company.

Janet: I think first you have to believe in yourself and in your idea. For example, myself, when I told people that I was going to start a cosmetics company based in Houston, everyone raised their eyebrows. You have to believe in yourself and your idea, and then you must persevere, persevere, persevere.

Russ: Okay, I think we've heard that before here on The Business Makers Show. Well, Janet, I really appreciate you giving us some time and sharing your story.

Janet: Thank you so much. It was fun.

Russ: And that concludes our discussion with Janet Gurwitch, to hear the whole interview just go to thebusinessmakers.com and just search on Gurwitch, G-U-R-W-I-T-C-H. And that wraps up this mornings Aflac BusinessMakers Flashback brought to you by Aflac, ask about it at work. You're listening to The BusinessMakers Show heard here and online at thebusinessmakers.com